Bank of Ireland staff reject pension proposals

Bank of Ireland staff have rejected proposed changes to their pension scheme.

The Irish Bank Officials Association (IBOA) said yesterday that its members had voted to reject a plan to offer new staff a hybrid scheme, which it claims is a mixture of both a defined benefit and a defined contribution scheme.

Payments from defined benefit schemes are linked to salaries, while defined contribution scheme payments are dictated by the investment performance of the underlying fund and offer less security to members. The IBOA General Secretary Larry Broderick said in a statement yesterday that the new scheme "will leave thousands of new staff in relative poverty upon retirement". He called on the bank to defer the implementation of the proposed changes.

Mr Broderick said that "if the bank is not prepared to concede to this reasonable request by Monday 26th June, the IBOA will have no alternative but to refer the matter to the Labour Relations Commission for conciliation and to initiate a major national campaign against the bank's proposals."

The bank - which plans to bring in the new scheme in October - said the IBOA statement was misleading and "that far from leaving future pensioner's dependant on State pensions as suggested by the IBOA, the new scheme is innovative, responsible and will provide long-term security for both employees and the pension scheme".

Mr Broderick said: "Staff cannot comprehend how a bank that reports profits in excess of €1.5 billion and has no problem paying extremely generous pensions to current and former senior executives would even consider such a draconian cost-cutting move.

Mr Broderick added: "The creation of a two-tier pension scheme for staff doing the same job will clearly not work and blatantly discriminates against vulnerable young employees who are finding it difficult to manage and plan for their future with increasing inflation and interest rates."